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UK government providing funding to new offshore wind and nuclear energy projects

31st January 2022

By: Rebecca Campbell

Creamer Media Senior Deputy Editor

     

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Last week the UK government announced that it was providing funds to help ensure the development of two low carbon energy projects in the country. The funding for both projects totalled more than £131-million.

The first announcement concerned the development of floating offshore wind power stations. Placing wind turbines onboard floating platforms would allow them to be positioned at the windiest locations around the British coast. The government will provide more than £31-million to develop this technology, a commitment which is being matched by industry to the tune of £30-million, giving a total development budget of £61-million.

The State funding was released last Tuesday to eleven projects which were selected to participate in the Floating Offshore Wind Demonstration Programme. Much of the development work will be focused on the design and construction of the floating platforms and their anchoring systems, as well as ancillary systems (including power transmission cables).

The programme is intended to result in the construction and deployment of a 2 MW (or bigger) demonstrator unit. The UK hopes to generate 1 GW of electricity from floating offshore wind turbines by 2030.

“We are already a world leader in offshore wind and floating technology is key to unlocking the full potential of the seas around Britain,” affirmed UK Energy Minister (roughly equivalent to a Deputy Minister in South Africa) Greg Hands. “These innovative projects will help us expand renewable energy further and faster across the UK and help to reduce our exposure [to] volatile global gas prices.”

Then on Thursday the British government also announced that it was committing £100-million to the Sizewell C new nuclear power plant (NPP) project, located in the English county of Suffolk. Sizewell is already the location of two NPPs, with the original Sizewell A currently being decommissioned, while Sizewell B was commissioned in 1995 and is currently projected to decommission in 2035.

Sizewell C is being developed by French energy group EDF and will be a near duplicate of the Hinkley Point C NPP, currently being built by EDF in the English county of Somerset. Both NPPs will employ EDF’s Generation III+ EPR pressurised water reactor (PWR) design. (By the by, Sizewell B is currently the only operating PWR in the UK; all the country’s other NPPs use advanced gas-cooled reactors.)

The State funding for Sizewell C is classified as an ‘option fee’ which EDF will be able to invest into the project, to help advance it to maturity and attract other investors. Once the project passes the point of its ‘Final Investment Decision’, the government will either get its money back (plus a financing return) in cash, or receive a shareholding in EDF of equal value. If the project does not go ahead, the government will ask for shares in the Sizewell C company, or for the actual Sizewell C site, or, again, get its money back, along with a financing return.

“In light of high global gas prices, we need to ensure Britain’s future energy supply is bolstered by reliable, affordable, low carbon power that is generated in this country,” highlighted UK Business and Energy Secretary (Cabinet Minister) Kwasi Kwarteng. “New nuclear is not only an important part of our plans to ensure greater energy independence, but to create high-quality jobs and drive economic growth. The funding announced [Thursday] will further support the development of Sizewell C during this important phase of negotiations as we seek to maximise investor confidence in this nationally significant project.”

Edited by Creamer Media Reporter

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